There are no tariffs on the first day, but Trump plans a trade review, the official told Reuters
David Lawder, Andrea Shalal and Steve Holland
WASHINGTON (Reuters) – President Donald Trump did not immediately impose tariffs on Monday, but he said in his inaugural address that the U.S. would collect “tremendous amounts” of revenue from foreign trade tariffs as his administration works to rebuild American industry.
A Trump administration official said the new president will issue a sweeping trade memorandum that does not include the current tariffs, but directs federal agencies to assess U.S. trade relations with China, Canada and Mexico.
After weeks of global speculation about what tariffs Trump would impose on his first day in office, news that Trump would need more time for the tariffs led to a rally in global stocks, while other major currencies strengthened against the dollar.
Trump did not mention specific tariff plans in his inaugural address, but he reiterated his intention to create the Internal Revenue Service, a new agency that will collect “tremendous amounts” of tariffs, duties and other revenue from foreign sources.
“I will immediately begin an overhaul of our trading system to protect American workers and families,” Trump said. “Instead of taxing our own citizens to enrich other countries, we will tariff and tax foreign countries to enrich our own citizens.”
Trump added that his policies would make America “another manufacturing nation.”
Howard Lutnick, Trump’s nominee for commerce secretary who has been appointed as his overall trade policy chief, told the rally that the IRS will “impose firewall tariffs” on American industry that will encourage foreign companies to build factories in America.
During his campaign, Trump promised to impose steep tariffs of 10% to 20% on global US imports and 60% on goods from China to reduce the trade deficit that now exceeds $1 trillion a year.
He said after the November election that he would sign “all the necessary documents” upon taking office to immediately impose an additional 25% import tax on imports from Canada and Mexico if they fail to curb the flow of illegal drugs and migrants entering the US illegally.
Such tariffs would tear up long-standing trade agreements, disrupt supply chains and raise costs, according to trade experts.
The official, confirming a Wall Street Journal report that cited a summary of Trump’s memo, said the new president would instead direct agencies to investigate and correct persistent trade deficits and address unfair trade and currency policies of other countries.
The memorandum will single out China, Canada and Mexico for scrutiny, but will not announce new tariffs, the official said. It will direct agencies to assess Beijing’s compliance with the 2020 trade deal with the US, as well as the status of agreements between the US, Mexico and Canada, the official said.
RELIEF MEETING
The US dollar fell heavily on the news against a basket of major trading partner currencies, with particularly strong gains in the euro, Canadian dollar, Mexican peso and . MSCI’s measure of global equity markets rose. US financial markets are closed for the Martin Luther King Jr. holiday.
Some industry groups and trade lawyers in Washington speculated that Trump would invoke the International Emergency Economic Powers Act, a law with broad powers to control imports during a state of emergency, to immediately impose tariffs.
But the upcoming trade memorandum signals a more methodical approach that would likely include trade investigations under other legal authorities such as Section 232 of the National Security Trade Act and Section 301 of the Unfair Trade Practices Statute. Trump invoked the laws during his first term, and investigations into steel and aluminum and Chinese imports have dragged on for months.
Canadian Finance Minister Dominic LeBlanc told reporters in Ottawa that it would be a positive step for the US to explore bilateral trade ties instead of imposing tariffs. Industry groups also expressed relief at the reported lack of immediate duties.
“American businesses would welcome a deliberative approach that identifies unfair trade practices and helps Americans succeed in the global economy,” said Jake Colvin, president of the National Foreign Trade Council, which represents a broad group of major U.S. companies on trade issues.
Trade analysts said they still expect Trump to press ahead with global tariffs early in his administration.
“The universal tariff was a key part of the economic plan that he pushed for, and I think he’s going to do what he said,” said Kelly Ann Shaw, a former White House trade adviser during Trump’s first term.
“This is an idea he has supported for a long time,” Shaw, now at the law firm Hogan Lovells, said in an interview last week.
PAST TRADING BOOK
In his first term in 2017-2021, the Trump administration used the investigations to impose tariffs on steel and aluminum imports and impose tariffs on about $370 billion worth of Chinese imports, sparking a bitter tariff war between the world’s two largest economies.
The U.S. and China ended the conflict in 2020 with an agreement with Beijing to increase purchases of American exports, from agricultural products to aircraft, by $200 billion a year, but that never followed through after the pandemic hit. The upcoming memorandum indicates that the Trump administration will try to force China to meet those commitments.
